Question

1. Danish Inc purchased a computer on January 1 , 2019 , for $ 1,600,000 . The straight - line method of depreciation was used , based on an expected life of 6 years and a residual value of $ 130,000 Prepare the journal entries to record depreciation for the first 6 months of 2021 and the sale of the computer on July 1 , 2021 , for . \$1,000,000

2. The following information is available to Sunwing Company to prepare its bank reconciliation a the end of March 2022The company recorded a \$1,764 cheque in payment of an account payable incorrectly as $1,674. The bank charged the company $45 for monthly standard service charges . A review of cashed cheques returned with the bank statement indicated that cheques amounting to $3,431 had not been cashed by March 31 March 31 general ledger Cash account balance is $12,010. The credit memo enclosed with the bank statement showed that the bank collected a $ 3,458 note plus interest of $ 125 on behalf of the company. The debit memo included with the bank statement listed a non-sufficient funds (NSF) cheque for $1,758 plus a $25 NSF bank charge as a result of a nonpayment from its customerLaurie and Jacob The bank charged the company $37 for printing new cheques during the month March 31 cash balance on the bank statement is $16,169. The bank recorded a deposit of $incorrectly as a deposit of $6.700. Prepare the bank reconciliation for SunWing Company at March 312022.

3. Explain the different method of Bonds and Investment Accounting we have done in class. If you start your own private company and wish to raise capital, what ratios should you consider important

4. Given the following information for Lesson Hercules Incorporated prepare their statement of cash flows for December 31, 2017 under ASPE. 2017^ * 2016^ * Cash550365 Accounts receivable 7585 Inventory3562 Prepaid Expenses225 Non-current - Note receivable112300 Propertyplant and Equipment430460 (net of depreciation ) Accounts payable1340 Accrued liabilities 1283 Common Shares934914 Retained Earnings 265240 Net income 50 Depreciation expense30 * in 000s

Answer 1

Answer to Question 1: Cost of Computer = $1,600,000 Residual Value = $130,000 Useful Life = 6 years Annual Depreciation = (Cost of Computer-Residual Value) / Useful Life Annual Depreciation = ($1,600,000 - $130,000) / 6 Annual Depreciation = $1,470,000 / 6 Annual Depreciation = $245,000 Depreciation for 2019 = $245,000 Depreciation for 2020 = $245,000 Depreciation for 2021 = $245,000 * (6/12) Depreciation for 2021= $122,500 Book Value of Computer = Cost of Computer-Depreciation for 2019 - Depreciation for 2020 - Depreciation for 2021 Book Value of Computer = $1,600,000 - $245,000 - $245,000 - $122,500 Book Value of Computer = $987,500 Credit Date July 1, 2021 Debit 122,500 122,500 July 1, 2021 General Journal Depreciation Expense Accumulated Depreciation Cash Accumulated Depreciation Gain on Sale of Computer (Equipment) Computer (Equipment) 1,000,000 612,500 12,500 1,600,000